Major Precious Metals Corp., a Canadian junior mining and exploration company, reports that it has acquired a 100% interest in the Skaergaard Project situated on the east coast of Greenland (Acquisition).
The company completed the acquisition according to the terms of a definitive purchase agreement signed with Platina Resources Ltd. In light of the recent Acquisition, Major Precious Metals was required to issue 55,000,000 common shares (Consideration Shares) and close a one-time cash payment of $500,000 (Consideration Payment) to Platina Resources.
Earlier, Major Precious Metals had deposited the Consideration Shares and the Consideration Payment in escrow, which was pending approval for the fundamental change from its shareholders and also from the Canadian Securities Exchange.
Major Precious Metals has now received this approval, and the Consideration Shares and the Consideration Payment have been issued to Platina Resources. Furthermore, the company has received the two mineral exploration licences (MEL) comprising the Skaergaard Project (MEL 2007/01 and 2012/25).
The Consideration Shares issued to Platina Resources are subject to a 24-month time-release pooling arrangement, and during this period, the shares should not be pledged, assigned, transferred, or otherwise traded.
Moreover, the Consideration Shares will be released from the pooling arrangement in four uniform tranches; the first share will be issued following six months and thereafter, subsequent shares will be released every six months.
The Consideration Shares are also subject to changes in corporate structure, expedited release relating to share price performance, or the distribution of the Consideration Shares to the shareholders of Platina Resources.
The Consideration Shares—besides the pooling arrangement levied by the terms of the Acquisition—are subject to a statutory hold period according to the relevant securities laws until February 28th, 2021.
Major Precious Metals is at arm’s-length from Platina Resources. According to the Acquisition terms, Platina Resources is permitted to nominate at least one member of the board of directors of Major Precious Metals. The latter expects that Platina Resources will exercise this right and recommend a nominee at a future date.
With regard to the completion of the Acquisition, Major Precious Metals has released 3,850,000 common shares (the Finder’s Fee Shares) to an arm’s-length third party that helped the company to ease the Acquisition process. The Finder’s Fee Shares are also subject to a statutory hold period of four months and one day until March 17th, 2020, according to relevant securities laws.
Additional details regarding the Skaergaard Project and the Acquisition process are given in the Exchange Form 2A Listing Statement prepared by Major Precious Metals in support of the Acquisition and fundamental change, a copy of which can be accessed under the company’s profile on SEDAR.
Early Warning Report
In relation to the Acquisition process and subsequent to the issuance of the Consideration Shares from escrow, Platina Resources has gained control and ownership of 55,000,000 common shares of Major Precious Metals, representing around 31.1% of the outstanding and issued common shares of the latter. Before completing the Acquisition, Platina Resources did not hold any securities of Major Precious Metals.
Platina Resources has acquired the common shares of Major Precious Metals for investment purposes, and in view of the Acquisition, it may periodically acquire or dispose of additional securities of the latter in the market, either privately or otherwise. Platina Resources has filed an early earning report in relation to the Acquisition process, a copy of which is available under the profile for Major Precious Metals on SEDAR.
Skaergaard MRE Update and Palladium Outlook
RPA Inc. strives to work on the Mineral Resource Estimate (MRE) for the Skaergaard Project. It will also integrate the results from a central resampling program, with MRE outcomes anticipated by 2020 end.
As earlier announced by Major Precious Metals, the Skaergaard Intrusion contains a major deposit of gold and platinum group metals (PGMs) governed by palladium, and most significantly, beyond the leading PGM producing regions of Russia and South Africa.
Major Precious Metals and its consultants will be assessing the effect of the latest increases in gold and palladium rates on the major assumptions and parameters for the MRE.
According to metal traders and analysts like S&P Global, the palladium metal, which touched as high as US$2,875.50 per ounce in February 2020 and now reached up to US$2,500 per ounce, has been impacted by considerable supply shortages.
Palladium is a major, crucial metal utilized in automobile catalytic converters (internal combustion engine or ICE) to cut down dangerous emissions. It is also important for nations to fulfill more rigorous global emissions standards on ICE vehicles.
As per S&P Global, the consensus view is that the possibility of a slowdown in the sales of the European Union automobiles caused by restrictions of COVID-19 lockdown has weighed price estimations for platinum, with a downgrade of 0.2% for 2020 as well as 2% average reductions for 2021–2024.
On the other hand, consensus rates for palladium are buoyant, mirroring a sharp rebound in the sales of Chinese ICE vehicles into 2021 and analyst estimations playing catch up with the robust price rally observed in the H2 of 2020. Therefore, according to S&P Global, price forecasts for palladium have been upgraded 1.8% and 3% to 9% for 2020 and 2021–2024, respectively.
Based on the latest price estimation for the palladium metal and the persistent strength in gold rates, Major Precious Metals anticipates to include other regions of mineralization that were not considered previously within the Skaergaard intrusion and to enhance the gold and palladium cut-off grades in comparison to historical estimates.